September 5, 2005
On the air | Downeast radio veterans get back into the fray with the pending purchase of WNSX
By Michael P. Mccauley
First there was David. Then, David was overtaken by Goliath. Now, Goliath seems bored with the spoils of battle and is willing to sell one small piece of booty back to David. Sound crazy? That's exactly what's happening in downeast Maine, with the impending sale of a local radio station by a large international firm to a small, but very experienced, independent broadcaster. It's too early to tell how this change will play out, but several radio professionals in the area are clearly in David's corner.
The property in question is WNSX-FM, a station whose 50,000-watt signal pulses through the airwaves from a transmitter and tower located in the Hancock County town of Sullivan. The signal blankets Bar Harbor and Ellsworth, but fades noticeably when traveling northwest toward Brewer. Clear Channel Communications of San Antonio, Texas bought WNSX from Bridge Broadcast Corporation of Bar Harbor in 2002 and used it to simulcast the programs of WFZX (101.7 The Fox), a classic rock station that serves Bangor, Ellsworth, Belfast and all points in between. Later that year, the station switched formats and became a Fox Sports Radio affiliate.
But two problems bedeviled that experiment. First, says Larry Julius, market manager for the Clear Channel stations in Bangor, the sports radio format proved to be less than compelling for listeners. Also, his company wrestled with the problem of sparse population downeast, making it difficult to draw large national advertisers. Clear Channel resumed simulcasts of The Fox in 2004, but Julius says the station continued to underperform, and his bosses finally agreed to sell it.
The buyers, Mark Osborne and Natalie Knox, have many years of local broadcasting experience. The two, who've been running an Ellsworth advertising agency for the last four years, first approached Clear Channel about a year ago through George Silverman, a Maine broadcaster and station broker. Following a series of discussions, Knox and Osborne incorporated Stony Creek Broadcasting earlier this year. Clear Channel agreed to sell WNSX to Stony Creek for $800,000, and the Federal Communications Commission quickly approved the deal. Closing likely will take place in early to mid-September, when the new owners will get the keys to the station and begin focusing it more tightly on the downeast community.
The WNSX sale is but one in a long series of radio deals, here and elsewhere, by large firms trying to sort through a variety of competitive pressures and regulatory changes. When you think about the ownership changes, you might get the feeling that downeast radio is caught up in a nasty cycle of binging and purging. But Silverman and others say that's just not so, since the larger feeding frenzy of station acquisitions that swept the nation in the 1990s simply took a few years to make it to this part of Maine. Osborne and Knox will now try to counter this trend, betting that year-round listeners in the downeast region will prefer the responsiveness of local radio operators to management by distant owners.
The advent of big-box radio
Osborne and Knox met during their high school days in Searsport, when Osborne operated a barely legal FM station that literally ran on a nine-volt battery. "And the way I knew that the nine-volt battery needed to be changed," he says, "was when Natalie would call my house and tell me that the radio station wasn't coming in too well." Knox remembers those times fondly as well. "We both used to be the kind of kids that hid under the bedcovers with a radio very close to our ears, so that our parents couldn't hear that we were awake at two o'clock in the morning listening to radio."
Knox and Osborne, who were married and then divorced, remain good friends and business partners; during their career, they've jointly owned five radio stations in Hancock, Penobscot and Waldo Counties. Word that Clear Channel Communications might want to sell one of its stations downeast whetted their appetite for returning to radio.
In 1995, Clear Channel owned 43 radio stations and 16 TV stations. But shortly thereafter, President Clinton signed the Telecommunications Act of 1996, the first comprehensive rewrite of electronic media law in 62 years. One key provision erased limits on the number of radio stations a company could own nationally; ownership caps were maintained, though loosened, in local markets. By 1999, Clear Channel either owned or programmed 625 radio stations; today, this industry giant owns or holds other interests in more than 1,200 U.S. radio stations, and more than 220 in other countries.
The arrival of Clear Channel in the Bangor and downeast areas in 2000 ˆ and of Cumulus Media, its biggest competitor, in 1997 ˆ came as a surprise to Osborne and Knox, who first became radio station owners in 1982 with the startup of Ellsworth's WKSQ-FM, better known as KISS 94. "I guess if somebody had asked Natalie and me in 1982, 'Do you foresee, 20 years from now, the largest broadcast group in the world owning your radio station in Ellsworth, Maine?' we would have laughed in their face," says Osborne. "And in 1996, if someone had asked us that question, I think we would have laughed in their face at that point, too."
The advent of so-called "big-box" radio was no longer a joke when, in 2000, a Michigan firm bought WKSQ and two other stations ˆ Bar Harbor's WLKE-FM and WBFB-FM in Belfast ˆ from Osborne and Knox, and promptly resold them to Clear Channel. The company now runs nine stations out of its offices in Bangor's Target Industrial Park (and nine other stations in Augusta, Rockland and Waterville), while Atlanta-based Cumulus Media operates five stations in Maine from its offices in Brewer. Three Cumulus stations have strong signals downeast, while five Clear Channel signals also come in loud and clear.
In the last few years, though, industry analysts have written at length about the ways in which companies like Clear Channel (which owns other advertising and media businesses) and Infinity Broadcasting (owned by media giant Viacom) got too big, too quick during the gold rush of the late 90s. Slumping advertising revenues, coupled with competition from new audio technologies, are now forcing some of these companies to think about selling stations whose profits are marginal. While this development has yet to produce a large number of sales, Silverman and others are noticing a subtler impact.
Take the downeast radio market, for example. Between the dearth of national advertising contracts and the difficulty of convincing Bangor-based sales reps to peddle ads in low-population areas, it's easy to see how a small station like WNSX became a liability for its parent company. Silverman now sees what he calls a "slight willingness" on the part of large radio companies "to listen to offers on pieces of their holdings which are somewhat disparate, or are more difficult to integrate into the total clusters of what they own."
A local voice
Enter Stony Creek Broadcasting. Silverman thinks independent station owners like Knox and Osborne are just what small-town radio needs to become vibrant and successful again. Back in the years before consolidation, he says, radio was a very scrappy business. "I always thought it was like a new chess game every day," he says. "But that fostered innovation. It fostered promotion that tried to draw attention to the individual station."
The advent of big-box radio ˆ like the brand practiced by some large national firms ˆmeans, in his view, that a lot of the innovation and excitement in local radio markets has been lost.
That's a problem WNSX's new owners plan to tackle directly. Knox, for one, is ecstatic to be in local radio again. "I just miss the ability to be able to broadcast information about church suppers," she says. "And if there is a fundraiser going on that the Red Cross is doing for somebody that's been burned out of their house ˆ all those types of things that we did over the years, I've so missed that." Adds Osborne, "We live and work in Ellsworth. It's the market that we know, that we have business contacts in, that we have relationships with listeners in."
The two will continue to run their ad agency with, in their minds, no conflicts of interest. Knox & Osborne Advertising arranges placements in a variety of media, and the pair say their clients ˆ many of whom are friends ˆ trust the two to make the best purchases for their promotional needs.
Osborne is reluctant to talk about the format that WNSX will run, as the sign-on date is just weeks away. However, he does know three things: "One, it's going to be an adult-appeal format," he says. "Two, I'll be coming out of retirement to do a daily air shift. And three, we want to make sure that the station sounds like downeast Maine," with special focus on the needs of year-round residents.
Veteran broadcasters familiar with downeast radio say this local approach is necessary in Hancock and Washington counties, where ratings are less important for advertising sales than a handshake, a good look in the eye and honest-to-goodness proof that buying ads will convince more people to patronize local businesses. That means sales reps will spend a significant amount of time calling on potential clients and essentially holding their hands until the marketplace comes back with a verdict on whether the advertising in question was effective. (Knox and Osborne say it's too early to predict their revenue picture for 2005 or 2006, but they say they're eager to hit the pavement in order to get their cash flow rolling.)
Tom Preble, an Old Town native who manages the Bangor-area Cumulus stations, says the radio industry's future may depend on local broadcasters who can speak to listeners better than distant owners can. "I think if you're not treating a radio company in a small market like Bangor" ˆ and, by extension, in downeast Maine ˆ "like a mom-and-pop radio company, then I think you're going to have problems," he says.
As for Osborne and Knox, he says, "Maybe there's an opportunity with Mark and Natalie to really bring that station to the front. And I have no doubt that they'll take the challenge seriously."
The property in question is WNSX-FM, a station whose 50,000-watt signal pulses through the airwaves from a transmitter and tower located in the Hancock County town of Sullivan. The signal blankets Bar Harbor and Ellsworth, but fades noticeably when traveling northwest toward Brewer. Clear Channel Communications of San Antonio, Texas bought WNSX from Bridge Broadcast Corporation of Bar Harbor in 2002 and used it to simulcast the programs of WFZX (101.7 The Fox), a classic rock station that serves Bangor, Ellsworth, Belfast and all points in between. Later that year, the station switched formats and became a Fox Sports Radio affiliate.
But two problems bedeviled that experiment. First, says Larry Julius, market manager for the Clear Channel stations in Bangor, the sports radio format proved to be less than compelling for listeners. Also, his company wrestled with the problem of sparse population downeast, making it difficult to draw large national advertisers. Clear Channel resumed simulcasts of The Fox in 2004, but Julius says the station continued to underperform, and his bosses finally agreed to sell it.
The buyers, Mark Osborne and Natalie Knox, have many years of local broadcasting experience. The two, who've been running an Ellsworth advertising agency for the last four years, first approached Clear Channel about a year ago through George Silverman, a Maine broadcaster and station broker. Following a series of discussions, Knox and Osborne incorporated Stony Creek Broadcasting earlier this year. Clear Channel agreed to sell WNSX to Stony Creek for $800,000, and the Federal Communications Commission quickly approved the deal. Closing likely will take place in early to mid-September, when the new owners will get the keys to the station and begin focusing it more tightly on the downeast community.
The WNSX sale is but one in a long series of radio deals, here and elsewhere, by large firms trying to sort through a variety of competitive pressures and regulatory changes. When you think about the ownership changes, you might get the feeling that downeast radio is caught up in a nasty cycle of binging and purging. But Silverman and others say that's just not so, since the larger feeding frenzy of station acquisitions that swept the nation in the 1990s simply took a few years to make it to this part of Maine. Osborne and Knox will now try to counter this trend, betting that year-round listeners in the downeast region will prefer the responsiveness of local radio operators to management by distant owners.
The advent of big-box radio
Osborne and Knox met during their high school days in Searsport, when Osborne operated a barely legal FM station that literally ran on a nine-volt battery. "And the way I knew that the nine-volt battery needed to be changed," he says, "was when Natalie would call my house and tell me that the radio station wasn't coming in too well." Knox remembers those times fondly as well. "We both used to be the kind of kids that hid under the bedcovers with a radio very close to our ears, so that our parents couldn't hear that we were awake at two o'clock in the morning listening to radio."
Knox and Osborne, who were married and then divorced, remain good friends and business partners; during their career, they've jointly owned five radio stations in Hancock, Penobscot and Waldo Counties. Word that Clear Channel Communications might want to sell one of its stations downeast whetted their appetite for returning to radio.
In 1995, Clear Channel owned 43 radio stations and 16 TV stations. But shortly thereafter, President Clinton signed the Telecommunications Act of 1996, the first comprehensive rewrite of electronic media law in 62 years. One key provision erased limits on the number of radio stations a company could own nationally; ownership caps were maintained, though loosened, in local markets. By 1999, Clear Channel either owned or programmed 625 radio stations; today, this industry giant owns or holds other interests in more than 1,200 U.S. radio stations, and more than 220 in other countries.
The arrival of Clear Channel in the Bangor and downeast areas in 2000 ˆ and of Cumulus Media, its biggest competitor, in 1997 ˆ came as a surprise to Osborne and Knox, who first became radio station owners in 1982 with the startup of Ellsworth's WKSQ-FM, better known as KISS 94. "I guess if somebody had asked Natalie and me in 1982, 'Do you foresee, 20 years from now, the largest broadcast group in the world owning your radio station in Ellsworth, Maine?' we would have laughed in their face," says Osborne. "And in 1996, if someone had asked us that question, I think we would have laughed in their face at that point, too."
The advent of so-called "big-box" radio was no longer a joke when, in 2000, a Michigan firm bought WKSQ and two other stations ˆ Bar Harbor's WLKE-FM and WBFB-FM in Belfast ˆ from Osborne and Knox, and promptly resold them to Clear Channel. The company now runs nine stations out of its offices in Bangor's Target Industrial Park (and nine other stations in Augusta, Rockland and Waterville), while Atlanta-based Cumulus Media operates five stations in Maine from its offices in Brewer. Three Cumulus stations have strong signals downeast, while five Clear Channel signals also come in loud and clear.
In the last few years, though, industry analysts have written at length about the ways in which companies like Clear Channel (which owns other advertising and media businesses) and Infinity Broadcasting (owned by media giant Viacom) got too big, too quick during the gold rush of the late 90s. Slumping advertising revenues, coupled with competition from new audio technologies, are now forcing some of these companies to think about selling stations whose profits are marginal. While this development has yet to produce a large number of sales, Silverman and others are noticing a subtler impact.
Take the downeast radio market, for example. Between the dearth of national advertising contracts and the difficulty of convincing Bangor-based sales reps to peddle ads in low-population areas, it's easy to see how a small station like WNSX became a liability for its parent company. Silverman now sees what he calls a "slight willingness" on the part of large radio companies "to listen to offers on pieces of their holdings which are somewhat disparate, or are more difficult to integrate into the total clusters of what they own."
A local voice
Enter Stony Creek Broadcasting. Silverman thinks independent station owners like Knox and Osborne are just what small-town radio needs to become vibrant and successful again. Back in the years before consolidation, he says, radio was a very scrappy business. "I always thought it was like a new chess game every day," he says. "But that fostered innovation. It fostered promotion that tried to draw attention to the individual station."
The advent of big-box radio ˆ like the brand practiced by some large national firms ˆmeans, in his view, that a lot of the innovation and excitement in local radio markets has been lost.
That's a problem WNSX's new owners plan to tackle directly. Knox, for one, is ecstatic to be in local radio again. "I just miss the ability to be able to broadcast information about church suppers," she says. "And if there is a fundraiser going on that the Red Cross is doing for somebody that's been burned out of their house ˆ all those types of things that we did over the years, I've so missed that." Adds Osborne, "We live and work in Ellsworth. It's the market that we know, that we have business contacts in, that we have relationships with listeners in."
The two will continue to run their ad agency with, in their minds, no conflicts of interest. Knox & Osborne Advertising arranges placements in a variety of media, and the pair say their clients ˆ many of whom are friends ˆ trust the two to make the best purchases for their promotional needs.
Osborne is reluctant to talk about the format that WNSX will run, as the sign-on date is just weeks away. However, he does know three things: "One, it's going to be an adult-appeal format," he says. "Two, I'll be coming out of retirement to do a daily air shift. And three, we want to make sure that the station sounds like downeast Maine," with special focus on the needs of year-round residents.
Veteran broadcasters familiar with downeast radio say this local approach is necessary in Hancock and Washington counties, where ratings are less important for advertising sales than a handshake, a good look in the eye and honest-to-goodness proof that buying ads will convince more people to patronize local businesses. That means sales reps will spend a significant amount of time calling on potential clients and essentially holding their hands until the marketplace comes back with a verdict on whether the advertising in question was effective. (Knox and Osborne say it's too early to predict their revenue picture for 2005 or 2006, but they say they're eager to hit the pavement in order to get their cash flow rolling.)
Tom Preble, an Old Town native who manages the Bangor-area Cumulus stations, says the radio industry's future may depend on local broadcasters who can speak to listeners better than distant owners can. "I think if you're not treating a radio company in a small market like Bangor" ˆ and, by extension, in downeast Maine ˆ "like a mom-and-pop radio company, then I think you're going to have problems," he says.
As for Osborne and Knox, he says, "Maybe there's an opportunity with Mark and Natalie to really bring that station to the front. And I have no doubt that they'll take the challenge seriously."
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